Because profit margins are notoriously slim in the hospitality business, restaurants, bars and cafés are always looking for ways to increase revenue or reduce costs to maximise the bottom line.

But there’s only so much you can do to increase what you make without increasing what you charge.

It’s a kind of paradox: your success could actually hamper your growth because once you’ve found that secret formula that works – competitive pricing, consistent food and service quality and regular patronage from customers who are also your fans – you risk upsetting the balance if you change anything.

If you’ve gotten to a great place with your venue, the logical way to get bigger is to expand into new locations, and do what you’ve done well already in other places.

Of course, this is not without its own set of issues, most notably the enormous sum of money it takes to open a new site. For the business owner who’s been through the kind of spending spree required to set up shop, the idea of a second location can seem daunting. And that’s where licensing and franchising can be good routes to take.

With both of these options, it’s someone else who takes on the financial risk of opening the new location while paying royalties or fees to you, the owner of the concept.

A new location set up in this way won’t make you as much money as opening your own second storefront, but it also doesn’t cost you nearly as much to get going, in money or time.

To help you decide what’s a better option for your brand, we look at how these two business models work, what the important differences are, and offer some insight from one of our customers that’s tried both out.

Licensing vs. franchising: what’s the difference?

In both cases, you’ll be expanding your brand without owning any of the new locations. The chief difference between the two is how much involvement and control you’ll have over them, and there are pros and cons to each choice.

What licensing is: an easier way to get additional revenue with your brand

With a licensing model, you’re basically entering into a contract that grants the right to use your intellectual property (IP) to another person or business. For a hospitality business, that includes things like your brand name, logo, recipes, and some processes.

There’s no template for how much or how little rights you can grant them, nor are there any hard and fast rules as to how much you should receive in royalties. All of that gets worked out during contract negotiations.

An example of a licensing model is seen in Uber, which licenses the rights to use Google’s Maps software in its ride-hailing app, and on its food delivery service Uber Eats. This way, Uber doesn’t have to create a maps software from scratch before going to market, and can focus on its core offering – connecting their drivers with their customers.

What licensing isn’t: a model you have much control over

In a license agreement, you typically lack control over performance, operations, or standards. There are reasons potential licensees go down this path – it saves them the time and money that’s required to create a brand or product that works, and what they’re licensing could only form a small part of the overall business they want to set up.

The downside of this is the potential lack of enforceable uniformity in your product and brand messaging. And without any oversight, it only takes one licensee doing things poorly to ruin the brand name for everyone else.

On the plus side, entering into a licence agreement is much less costly for you, in terms of both time and money. Once the deal is signed, the licensee goes off and mostly does their own thing, and the royalties you collect can become a steady source of passive income on top of the revenue you’re earning with your own venue.

In a franchise model, you get to dictate things like operational processes, how and where ingredients are sourced, and what performance quotas you want. Compliance becomes the condition for access to your IP.

You also get to decide how all marketing is conducted, with franchisees paying into a fund that acts as a unified budget for all locations. For hospitality business owners who’ve worked hard to build a successful business and brand, there’s great appeal to a model that protects their reputation and IP in ways that licensing just can’t.

What franchising isn’t: easy or cheap

There’s much, much more work that goes into creating a successful franchise, from creating the model, to managing distribution, to the never ending oversight ensuring all franchisees are playing by the rules.

The costs, as you might imagine, are much higher, too. You’ll need to invest plenty of money (at least at the start) to do things like:

research the market to understand how much competition you’ll face, and how likely it will be for your franchise system to succeed.

create the training manuals and materials needed to teach new franchisees how to open and operate a successful branch of your business.

put together marketing and training plans for your franchise.

advertise your intent to franchise your business to potential franchisees.

conduct the necessary due diligence before bringing new franchisees on board.

Legal costs will also stack up as you need engage a lawyer to prepare franchise agreements and a disclosure document. You might also need to hire other specialist third parties such as operational and marketing consultants, bookkeepers and financial advisers to prepare your franchise for sale.

These are some other things to consider on your path to becoming a franchisor:

Although you get plenty of control, the royalties and fees you collect as the franchisor is much less than what you’ll make by owning and operating a second or third venue (also known as a company-owned store) yourself.

Franchise owners aren’t your employees, so while they are replicating your business model, you don’t have direct control over their management styles.

You might need to invest a lot of time and effort into looking for franchise buyers, and then evaluating if they are the right fit to carry your brand into market.

So which is the better option for you?

While both have the potential to grow your business and put more money in your pocket, there are so many variables from business to business that the decision between the two comes down to one of mechanics and personal preference. Also, it doesn’t necessarily have to be an either/or proposition.

It’s cheaper for Uber to license Google’s Maps content instead of creating a map from scratch for example, but licensing the Maps content costs money – and this cost will only increase as Uber proliferates globally. So at some point, it might make more financial sense for a company like Uber to just build their own mapping software instead of giving a certain portion of their revenue to Google on an ongoing basis.

“It [licensing] allowed us to comfortably share our IP and have a go at recreating our model elsewhere without the large initial outlay of time and money it would have taken to fully franchise…It worked really well doing it this way, as we had an opportunity to test the concept of expansion with minimal risk,” Carson said.

By the time the third licensee opened up shop, Carson and Day’s original location had become a well-oiled and profitable machine. They knew their business better than ever, and had the confidence to give franchising a shot.

It was several months of hard work and preparation to develop their model, but once they had their franchise fully defined, Carson and Day migrated their existing licensees over to the new model.

It took only three years for Acai Brothers to reach 20 locations. Today, there are 25 different shops that bear their name all over Australia – with international expansion as the next step in their plans.

Read the full story about how Acai Brothers franchised their way Australia-wide in just three short years, and sign up for our newsletter for more tips on growing your hospitality business.

Because profit margins are notoriously slim in the hospitality business, restaurants, bars and cafés are always looking for ways to increase revenue or reduce costs to maximise the bottom line.

But there’s only so much you can do to increase what you make without increasing what you charge.

It’s a kind of paradox: your success could actually hamper your growth because once you’ve found that secret formula that works – competitive pricing, consistent food and service quality and regular patronage from customers who are also your fans – you risk upsetting the balance if you change anything.

If you’ve gotten to a great place with your venue, the logical way to get bigger is to expand into new locations, and do what you’ve done well already in other places.

Of course, this is not without its own set of issues, most notably the enormous sum of money it takes to open a new site. For the business owner who’s been through the kind of spending spree required to set up shop, the idea of a second location can seem daunting. And that’s where licensing and franchising can be good routes to take.

With both of these options, it’s someone else who takes on the financial risk of opening the new location while paying royalties or fees to you, the owner of the concept.

A new location set up in this way won’t make you as much money as opening your own second storefront, but it also doesn’t cost you nearly as much to get going, in money or time.

To help you decide what’s a better option for your brand, we look at how these two business models work, what the important differences are, and offer some insight from one of our customers that’s tried both out.

Licensing vs. franchising: what’s the difference?

In both cases, you’ll be expanding your brand without owning any of the new locations. The chief difference between the two is how much involvement and control you’ll have over them, and there are pros and cons to each choice.

What licensing is: an easier way to get additional revenue with your brand

With a licensing model, you’re basically entering into a contract that grants the right to use your intellectual property (IP) to another person or business. For a hospitality business, that includes things like your brand name, logo, recipes, and some processes.

There’s no template for how much or how little rights you can grant them, nor are there any hard and fast rules as to how much you should receive in royalties. All of that gets worked out during contract negotiations.

An example of a licensing model is seen in Uber, which licenses the rights to use Google’s Maps software in its ride-hailing app, and on its food delivery service Uber Eats. This way, Uber doesn’t have to create a maps software from scratch before going to market, and can focus on its core offering – connecting their drivers with their customers.

What licensing isn’t: a model you have much control over

In a license agreement, you typically lack control over performance, operations, or standards. There are reasons potential licensees go down this path – it saves them the time and money that’s required to create a brand or product that works, and what they’re licensing could only form a small part of the overall business they want to set up.

The downside of this is the potential lack of enforceable uniformity in your product and brand messaging. And without any oversight, it only takes one licensee doing things poorly to ruin the brand name for everyone else.

On the plus side, entering into a licence agreement is much less costly for you, in terms of both time and money. Once the deal is signed, the licensee goes off and mostly does their own thing, and the royalties you collect can become a steady source of passive income on top of the revenue you’re earning with your own venue.

What franchising is: a replica (almost) of your original business that other people pay to set up

If you decide to franchise your business, you’ll have a lot more control over the people you’re trusting with your brand. You’re essentially teaching people how to recreate a proven business model – one that you’ve designed and put together.

In a franchise model, you get to dictate things like operational processes, how and where ingredients are sourced, and what performance quotas you want. Compliance becomes the condition for access to your IP.

You also get to decide how all marketing is conducted, with franchisees paying into a fund that acts as a unified budget for all locations. For hospitality business owners who’ve worked hard to build a successful business and brand, there’s great appeal to a model that protects their reputation and IP in ways that licensing just can’t.

What franchising isn’t: easy or cheap

There’s much, much more work that goes into creating a successful franchise, from creating the model, to managing distribution, to the never ending oversight ensuring all franchisees are playing by the rules.

The costs, as you might imagine, are much higher, too. You’ll need to invest plenty of money (at least at the start) to do things like:

research the market to understand how much competition you’ll face, and how likely it will be for your franchise system to succeed.

create the training manuals and materials needed to teach new franchisees how to open and operate a successful branch of your business.

put together marketing and training plans for your franchise.

advertise your intent to franchise your business to potential franchisees.

conduct the necessary due diligence before bringing new franchisees on board.

Legal costs will also stack up as you need engage a lawyer to prepare franchise agreements and a disclosure document. You might also need to hire other specialist third parties such as operational and marketing consultants, bookkeepers and financial advisers to prepare your franchise for sale.

These are some other things to consider on your path to becoming a franchisor:

Although you get plenty of control, the royalties and fees you collect as the franchisor is much less than what you’ll make by owning and operating a second or third venue (also known as a company-owned store) yourself.

Franchise owners aren’t your employees, so while they are replicating your business model, you don’t have direct control over their management styles.

You might need to invest a lot of time and effort into looking for franchise buyers, and then evaluating if they are the right fit to carry your brand into market.

So which is the better option for you?

While both have the potential to grow your business and put more money in your pocket, there are so many variables from business to business that the decision between the two comes down to one of mechanics and personal preference. Also, it doesn’t necessarily have to be an either/or proposition.

It’s cheaper for Uber to license Google’s Maps content instead of creating a map from scratch for example, but licensing the Maps content costs money – and this cost will only increase as Uber proliferates globally. So at some point, it might make more financial sense for a company like Uber to just build their own mapping software instead of giving a certain portion of their revenue to Google on an ongoing basis.

Case study: Acai Brothers Superfood Bar

After best mates Sam Carson and Ben Day successfully started the first Acai Brothers Superfood Bar in the Redwoods area in Melbourne, it didn’t long for them to think about expansion. But they found the franchising model too complex and expensive a leap for a concept they weren’t sure would even work elsewhere. Their solution? Test the wider market first by licensing their brand.

“It [licensing] allowed us to comfortably share our IP and have a go at recreating our model elsewhere without the large initial outlay of time and money it would have taken to fully franchise…It worked really well doing it this way, as we had an opportunity to test the concept of expansion with minimal risk,” Carson said.

By the time the third licensee opened up shop, Carson and Day’s original location had become a well-oiled and profitable machine. They knew their business better than ever, and had the confidence to give franchising a shot.

It was several months of hard work and preparation to develop their model, but once they had their franchise fully defined, Carson and Day migrated their existing licensees over to the new model.

It took only three years for Acai Brothers to reach 20 locations. Today, there are 25 different shops that bear their name all over Australia – with international expansion as the next step in their plans.

Read the full story about how Acai Brothers franchised their way Australia-wide in just three short years, and sign up for our newsletter for more tips on growing your hospitality business.

Founded in 2014, Acai Brothers Superfood Bar was the brain-child of Ben Day and Sam Carson, two best mates and local gym owners in the Redwoods area, Melbourne. Making the most of their knowledge about the health and fitness industry and their understanding of the local area, Acai Brothers has grown from one successful local café to a nationwide franchise with plans for international growth.

As part of our ongoing Behind the Kounta series, we spoke to Acai Brothers founders, Ben Day and Sam Carson, about how they’ve grown to have over 20 locations in Australia through franchising, and what they’ve learned along the way.

When you started with the first store, it was evident that you had found a great opportunity in the market. What was the process behind discovering this?

Being gym owners, both Ben and I were in a unique position with access to a specific local market. We spoke to local gym goers day in and out and found many of our customers were traveling outside the local Redwoods area to get acai bowls.

So over brunch one morning, Ben and I discussed the potential of bringing acai bowls to Redwoods. It started as a conversation over breakfast, but from there (with a little research), we realised that no one in the area really specialised in offering superfoods and had a good lifestyle brand.

It was important to us to qualify the idea and size of the market before we made any moves, so we spent a few weeks finding out what foods our gym customers wished was available in the local area and if they’d be interested in a superfoods bar.

How did you grow from one little superfoods bar in Redwoods to 20 stores across Australia?

When we were running our first store, a regular customer’s nephew asked if we had any plans for expansion, and that was when the idea first entered our heads! We hadn’t thought about it before being as stuck as we were into running our first venue at that point.

But once we had considered it more, we just became more excited about the potential Acai Brothers had to expand beyond the local area. The challenge was finding a way to comfortably share all our intellectual property (IP), without having to invest in a full franchise model as we felt we didn’t have enough proof in the market to warrant that sort of outlay at the time.

Eventually, we chose to move forward by licensing our brand – this was a much cheaper and quicker solution that allowed us to test how people responded to Acai Brothers in other areas. It also allowed us to comfortably share our IP and have a go at recreating our model elsewhere without the large initial investment of time and money it would have taken to fully franchise.

I think at the time, we definitely would have preferred to fully franchise Acai Brothers had it been an option, but looking back, it worked really well doing it this way as we had an opportunity to test the concept of expansion with minimal risk.

We stuck with the licensing model for three further openings, by which time we’d developed a proven and profitable business model, ironed out a lot of teething issues and gained confidence around our potential to expand nationally.

During a meeting with our lawyer, we decided to invest in franchising Acai Brothers for store number four. This was a huge decision for us as it meant a lot of work getting all the systems, procedures and manuals up to scratch. Initially, it took us a few months of solid work to get to a point where we were franchisable, but in reality, it is an ongoing process with continual learnings and improvements.

Once we’d completed what we needed, we retrospectively migrated the three previous licensees to our new franchise model and before long, added another sixteen stores to our portfolio.

What’s your secret to finding franchisees?

We find franchisees mainly through word of mouth, referrals from our current store owners and social media. We don’t do franchise exhibitions or any expensive franchise marketing as firstly, we haven’t had to, and secondly, the quality of leads we currently get is really high. We’ve found that this organic approach attracts people who have an affinity with the Acai Brothers brand and a genuine interest in health and fitness, specifically the superfoods industry.

In my mind, the people attending franchise exhibitions are looking for a business opportunity, perhaps in health and fitness, but they wouldn’t have reached out to us based on a genuine love for what we do. At this stage, we want to stick to expanding Acai Brothers with people who love what we’re doing.

We get about five enquiries a day and every time we open a new store we get an influx of more. I currently have a database of 120 qualified leads who are suitable and interested in buying an Acai Brothers franchise.

What do you look for in a prospective franchisee?

There are four things we look for in the leads we have:

A fair amount of business experience

Good cash flow management skills

Some knowledge about marketing and branding

An incredible personality that’ll help them dive into the local community with ease.

Another important trait we look for is the ability to remove the ego and listen to advice. That is something I consider to be a key to success in business overall, but even more so in franchising, when you are paying to learn a proven business model.

How has your day-to-day work changed over the past few years?

With our first Acai Brothers store we were simply working in and operating our store, doing the usual activities a local café owner would do; stock taking, creating menus, managing staff, serving customers etc.

After franchising, our time has moved from behind the counter to on the road! When we first expanded, Ben and I shared all the tasks that needed to be done, but over time we discovered our individual strengths and divided our roles accordingly.

I’m good at the legal and franchising side of things and Ben is good at the marketing and branding. Day-to-day, I support franchisees, look for new sites, deal with leads and manage suppliers while Ben creates and runs the monthly marketing campaigns, ensuring their success and optimising them as we go.

What would you say are your keys to success?

Throughout our entire journey, we’ve learned that whether you’re running one local café or a 20-store franchise, you’re only as good as your people. Just like the hiring the right staff for a café or restaurant directly impacts the customer experience and people’s perception of your business, the right franchisees do the same.

Picking the right people to work with will help multiply your brand, so qualifying and nurturing the right franchisees is absolutely paramount.

What’s the most successful marketing activity you’ve done to date?

We put a face to every single store. Without a doubt, that has been the most successful marketing decision we have made.

We don’t want to be the next ‘Nandos’ and ‘Subway’ – we avoid being a ‘big franchise’ and focus on the local areas. At the end of the day, the key to our success is our franchisees’ success, and the key to their success inevitably comes from being actively involved in their local communities.

Having trained over 20 franchisees in marketing locally, what advice would you give to someone looking to grow their own local business?

We ask our franchisees to spend at least five hours a week going out into the local community – literally get out from behind the counter and interacting with all the other businesses in the area.

It’s as simple as this: if you create five relationships with five other businesses in a week, in twelve months you will have over 200 businesses to tap into. Each has its own database of customers and they can assist you in your localised marketing efforts, from placing your flyers in their shopfronts to leaving you online reviews. We believe there should always be an hour in every working day set aside just for building relationships and doing local marketing.

Have you changed the way you train your franchisees recently?

We recently streamlined our training to one week, and implemented a national training team consisting of a professional trainer and one of our original franchisees. Now that we’ve reached over 20 stores, we’ve got great insights into what works and what doesn’t and can prioritise the time spent on each training topic by its level of importance.

One particular area that has been bumped up the list is the education we offer about Acai Brothers as a brand, and also in-depth training on superfoods as a whole.

This came from the realisation that when we launch in new area, customers have many questions about who we are and what the benefits of superfoods are. Being knowledgeable in these areas really helps our franchisees sell and generate return customers. We obviously also train our staff on the systems and operations of the business too, everything from running our loyalty programs to making a smoothie.

What would you say the biggest myth about franchising is?

The biggest myth is that franchising is a money game. So many franchisors think it’s a quick way to earn money and they do their franchisees a disservice.

Franchising is hard to do well – in most cases you can’t just sit back and watch the cash flow in. You’re heavily involved with all your franchisees and have a responsibility to make sure they are well supported.

Unfortunately, so many franchises in Australia are slack on this front and it has given the industry a less-than-stellar reputation.

What core values do you try to instill in all your staff and franchisees?

We emphasise three things; continuous education, adaptability and removing the ego. Ben and I are constantly learning about the acai and superfoods movement in Europe, America and even Brazil, where acai originates.

The market is a living, breathing, changing environment and we never sit back and rest on our laurels, especially not when something appears to be working. We have a firm focus on continual learning and to do that effectively, it’s important to remove the ego.

So often people value their own opinion too much and that gets in the way of discovering new information and learning from others.

Who do you look up to in the industry?

I have a good friend who has been very successful in business and I relate to him specifically because I admire the way he runs his business, treats his staff, and sticks to his values.

Other than that Richard Branson, I guess for the same reasons. He openly states that most of his great ideas came from his team. I don’t really look up to one person in particular, I tend to collect advice from a variety of sources and have my own take on it.

What systems have you used that have helped grow your franchise?

Without a doubt, Kounta has been the number one system we’ve used that has helped us grow. We use it for all our reporting and our franchisees use it for their point of sale, as well as to manage things like inventory, staff rostering and their loyalty programs.

We integrate our Kounta point of sale with Xero, our accounting software, which gives our accountant the essential data he needs to keep the books, so we’ve saved a lot of time and no longer need to focus very much on that side of the business.

Overall, we wouldn’t have been able to grow like we have without having a point of sale system making everything more efficient, it was one of the best business decisions we’ve made since opening our first store.

What’s does the future look like for Acai Brothers?

We have a lot lined up for Australia, but we’re also considering taking Acai Brothers to Asia where health and wellness is on the rise and the superfoods movement is increasing exponentially.

We’re looking for an area where both locals and foreigners can afford the product, and so Singapore or Hong Kong might be good places for us to start initially, maybe the Philippines then perhaps China at a later stage. At the moment, we need to become more familiar with the demographic and psychographic in those markets before we can develop a solid plan of attack.

After we’ve solidified the where and when, we then need to change the pricing and marketing structure for each country. It’s all in development at the moment!

What has been your biggest learning curve and what advice would you give to someone thinking about franchising?

When you’re a young franchise and you get enquiries, the passion and excitement takes over and it’s easy to say yes to everyone. Making sure you qualify prospective franchisees as soon as they start asking questions stops you from wasting your time and theirs.

We’re been lucky in that we haven’t made any serious mistakes yet, I just think over time we’ve realised that there are some hard and fast rules that we can stick to to save time.

Everyone thinks franchising is an easy way to create a big brand, I’d like to reiterate that it is possibly the hardest thing I have ever done.

I would say, don’t underestimate the amount of work it takes to successfully franchise a business, make sure everything is finalised before you go to market and make sure you have the right people around you.

We wouldn’t be where we are now without our lawyer and help from franchise specialists. It costs money and hard work, but it’s absolutely worth it if you’ve got the passion for what you’re doing.

Image Source: Founded in 2014, Acai Brothers Superfood Bar was the brain-child of Ben Day and Sam Carson, two best mates and local gym owners in the Redwoods area, Melbourne. Making the most of their knowledge about the health and fitness industry and their understanding of the local area, Acai Brothers has grown from one successful local café to a nationwide franchise with plans for international growth.

As part of our ongoing Behind the Kounta series, we spoke to Acai Brothers founders, Ben Day and Sam Carson, about how they’ve grown to have over 20 locations in Australia through franchising, and what they’ve learned along the way.

When you started with the first store, it was evident that you had found a great opportunity in the market. What was the process behind discovering this?

Being gym owners, both Ben and I were in a unique position with access to a specific local market. We spoke to local gym goers day in and out and found many of our customers were traveling outside the local Redwoods area to get acai bowls.

So over brunch one morning, Ben and I discussed the potential of bringing acai bowls to Redwoods. It started as a conversation over breakfast, but from there (with a little research), we realised that no one in the area really specialised in offering superfoods and had a good lifestyle brand.

It was important to us to qualify the idea and size of the market before we made any moves, so we spent a few weeks finding out what foods our gym customers wished was available in the local area and if they’d be interested in a superfoods bar.

How did you grow from one little superfoods bar in Redwoods to having over 20 stores across Australia?

When we were running our first store, a regular customer’s nephew asked if we had any plans for expansion, and that was when the idea first entered our heads! We hadn’t thought about it before being as stuck as we were into running our first venue at that point.

But once we had considered it more, we just became more excited about the potential Acai Brothers had to expand beyond the local area. The challenge was finding a way to comfortably share all our intellectual property (IP), without having to invest in a full franchise model as we felt we didn’t have enough proof in the market to warrant that sort of outlay at the time.

Eventually, we chose to move forward by licensing our brand – this was a much cheaper and quicker solution that allowed us to test how people responded to Acai Brothers in other areas. It also allowed us to comfortably share our IP and have a go at recreating our model elsewhere without the large initial investment of time and money it would have taken to fully franchise.

I think at the time, we definitely would have preferred to fully franchise Acai Brothers had it been an option, but looking back, it worked really well doing it this way as we had an opportunity to test the concept of expansion with minimal risk.

We stuck with the licensing model for three further openings, by which time we’d developed a proven and profitable business model, ironed out a lot of teething issues and gained confidence around our potential to expand nationally.

During a meeting with our lawyer, we decided to invest in franchising Acai Brothers for store number four. This was a huge decision for us as it meant a lot of work getting all the systems, procedures and manuals up to scratch. Initially, it took us a few months of solid work to get to a point where we were franchisable, but in reality, it is an ongoing process with continual learnings and improvements.

Once we’d completed what we needed, we retrospectively migrated the three previous licensees to our new franchise model and before long, added another sixteen stores to our portfolio.

What’s your secret to finding franchisees?

We find franchisees mainly through word of mouth, referrals from our current store owners and social media. We don’t do franchise exhibitions or any expensive franchise marketing as firstly, we haven’t had to, and secondly, the quality of leads we currently get is really high. We’ve found that this organic approach attracts people who have an affinity with the Acai Brothers brand and a genuine interest in health and fitness, specifically the superfoods industry.

In my mind, the people attending franchise exhibitions are looking for a business opportunity, perhaps in health and fitness, but they wouldn’t have reached out to us based on a genuine love for what we do. At this stage, we want to stick to expanding Acai Brothers with people who love what we’re doing.

We get about five enquiries a day and every time we open a new store we get an influx of more. I currently have a database of 120 qualified leads who are suitable and interested in buying an Acai Brothers franchise.

What do you look for in a prospective franchisee?

There are four things we look for in the leads we have:

A fair amount of business experience

Good cash flow management skills

Some knowledge about marketing and branding

An incredible personality that’ll help them dive into the local community with ease.

Another important trait we look for is the ability to remove the ego and listen to advice. That is something I consider to be a key to success in business overall, but even more so in franchising, when you are paying to learn a proven business model.

How has your day-to-day work changed over the past few years?

With our first Acai Brothers store we were simply working in and operating our store, doing the usual activities a local café owner would do; stock taking, creating menus, managing staff, serving customers etc.

After franchising, our time has moved from behind the counter to on the road! When we first expanded, Ben and I shared all the tasks that needed to be done, but over time we discovered our individual strengths and divided our roles accordingly.

I’m good at the legal and franchising side of things and Ben is good at the marketing and branding. Day-to-day, I support franchisees, look for new sites, deal with leads and manage suppliers while Ben creates and runs the monthly marketing campaigns, ensuring their success and optimising them as we go.

What would you say are your keys to success?

Throughout our entire journey, we’ve learned that whether you’re running one local café or a 20-store franchise, you’re only as good as your people. Just like the hiring the right staff for a café or restaurant directly impacts the customer experience and people’s perception of your business, the right franchisees do the same.

Picking the right people to work with will help multiply your brand, so qualifying and nurturing the right franchisees is absolutely paramount.

What’s the most successful marketing activity you’ve done to date?

We put a face to every single store. Without a doubt, that has been the most successful marketing decision we have made.

We don’t want to be the next ‘Nandos’ and ‘Subway’ – we avoid being a ‘big franchise’ and focus on the local areas. At the end of the day, the key to our success is our franchisees’ success, and the key to their success inevitably comes from being actively involved in their local communities.

Having trained over 20 franchisees in marketing locally, what advice would you give to someone looking to grow their own local business?

We ask our franchisees to spend at least five hours a week going out into the local community – literally get out from behind the counter and interacting with all the other businesses in the area.

It’s as simple as this: if you create five relationships with five other businesses in a week, in twelve months you will have over 200 businesses to tap into. Each has its own database of customers and they can assist you in your localised marketing efforts, from placing your flyers in their shopfronts to leaving you online reviews. We believe there should always be an hour in every working day set aside just for building relationships and doing local marketing.

Have you changed the way you train your franchisees recently?

We recently streamlined our training to one week, and implemented a national training team consisting of a professional trainer and one of our original franchisees. Now that we’ve reached over 20 stores, we’ve got great insights into what works and what doesn’t and can prioritise the time spent on each training topic by its level of importance.

One particular area that has been bumped up the list is the education we offer about Acai Brothers as a brand, and also in-depth training on superfoods as a whole.

This came from the realisation that when we launch in new area, customers have many questions about who we are and what the benefits of superfoods are. Being knowledgeable in these areas really helps our franchisees sell and generate return customers. We obviously also train our staff on the systems and operations of the business too, everything from running our loyalty programs to making a smoothie.

What would you say the biggest myth about franchising is?

The biggest myth is that franchising is a money game. So many franchisors think it’s a quick way to earn money and they do their franchisees a disservice.

Franchising is hard to do well – in most cases you can’t just sit back and watch the cash flow in. You’re heavily involved with all your franchisees and have a responsibility to make sure they are well supported.

Unfortunately, so many franchises in Australia are slack on this front and it has given the industry a less-than-stellar reputation.

What core values do you try to instill in all your staff and franchisees?

We emphasise three things; continuous education, adaptability and removing the ego. Ben and I are constantly learning about the acai and superfoods movement in Europe, America and even Brazil, where acai originates.

The market is a living, breathing, changing environment and we never sit back and rest on our laurels, especially not when something appears to be working. We have a firm focus on continual learning and to do that effectively, it’s important to remove the ego.

So often people value their own opinion too much and that gets in the way of discovering new information and learning from others.

Who do you look up to in the industry?

I have a good friend who has been very successful in business and I relate to him specifically because I admire the way he runs his business, treats his staff, and sticks to his values.

Other than that Richard Branson, I guess for the same reasons. He openly states that most of his great ideas came from his team. I don’t really look up to one person in particular, I tend to collect advice from a variety of sources and have my own take on it.

What systems have you used that have helped grow your franchise?

Without a doubt, Kounta has been the number one system we’ve used that has helped us grow. We use it for all our reporting and our franchisees use it for their point of sale, as well as to manage things like inventory, staff rostering and their loyalty programs.

We integrate our Kounta point of sale with Xero, our accounting software, which gives our accountant the essential data he needs to keep the books, so we’ve saved a lot of time and no longer need to focus very much on that side of the business.

Overall, we wouldn’t have been able to grow like we have without having a point of sale system making everything more efficient, it was one of the best business decisions we’ve made since opening our first store.

What’s does the future look like for Acai Brothers?

We have a lot lined up for Australia, but we’re also considering taking Acai Brothers to Asia where health and wellness is on the rise and the superfoods movement is increasing exponentially.

We’re looking for an area where both locals and foreigners can afford the product, and so Singapore or Hong Kong might be good places for us to start initially, maybe the Philippines then perhaps China at a later stage. At the moment, we need to become more familiar with the demographic and psychographic in those markets before we can develop a solid plan of attack.

After we’ve solidified the where and when, we then need to change the pricing and marketing structure for each country. It’s all in development at the moment!

What has been your biggest learning curve and what advice would you give to someone thinking about franchising?

When you’re a young franchise and you get enquiries, the passion and excitement takes over and it’s easy to say yes to everyone. Making sure you qualify prospective franchisees as soon as they start asking questions stops you from wasting your time and theirs.

We’re been lucky in that we haven’t made any serious mistakes yet, I just think over time we’ve realised that there are some hard and fast rules that we can stick to to save time.

Everyone thinks franchising is an easy way to create a big brand, I’d like to reiterate that it is possibly the hardest thing I have ever done.

I would say, don’t underestimate the amount of work it takes to successfully franchise a business, make sure everything is finalised before you go to market and make sure you have the right people around you.

We wouldn’t be where we are now without our lawyer and help from franchise specialists. It costs money and hard work, but it’s absolutely worth it if you’ve got the passion for what you’re doing.

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